Housing Market Bubble?

This is Doug Hastings, VP of Moody radio and were thankful for support from our listeners, and businesses like United faith mortgage.

Let's call it the couch cushion – this is the moment when you need a tip for the pizza man a few bucks for your kids lunch or you can't say no to the sweet eight-year-old and her thin mints, but you've got no cash and no other options but to tear apart the house searching for hidden money. It's Ryan from United faith mortgage and it's funny how we can usually find a way to scrounge together a few bucks, hidden around our house. Shame on you if it's from your kids piggybacks for many listeners know there's enough money sitting inside your home to buy a swimming pool full of thin mints, home values have gone up across the country. The last few years, leaving many of us with a good chunk of equity tucked inside our homes that we could cash out to use for life. If you'd like us to help. We are United faith mortgage United faith mortgage is a DBA of United mortgage Corp. 25 Millville Park Rd., Melville, NY. Licensed mortgage banker for all licensing information, go to an MLS consumer access.org corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah and most investors averted the Tulip bubble that burst in 1637.

Then there was the stock bubble of 1929 that launched the Great Depression, and of course the housing bubble of 2008. Are we there again. Rob West housing prices have risen dramatically in the last five years, leading many to believe it's actually another bubble about to burst all talk about that today.

That's all your calls on any financial topic at 800-525-7000 800-525-7000.

This is moneywise live for God's principal shape our financial decision. Okay so invest defines a bubble as economic cycle where an asset trades at prices that greatly exceed the assets intrinsic value. In other words, something is way more expensive that it should be. There is a strong argument to be made that that's where housing prices are today, the average home prices are now 40% above the great recession low point in 2012 and even more amazing 4% above the peak of housing values in 2006, and since the last housing bubble set off a worldwide recession. It's no wonder some folks are worried that today's housing prices are signaling and other financial calamity. But many analysts point out that conditions are not the same today, that all things considered. Current values are not that far out of line. Maybe only 5 1/2% overvalued and although 5 1/2% might not seem like much. That coupled was still high unemployment levels from coded means that the upward trend in home prices isn't sustainable.

In other words, things will cool off in the near future. Covert itself might have triggered a housing crash a year ago and it looked like it might, but the opposite is actually happened after an initial downturn from covert shutdowns, real estate transactions were allowed to resume by then people have discovered they could work from home, and schools began teaching virtual classes will that man said people have more choices for where they live and people started looking for homes in the suburbs in droves.

Will that continued over the last year or also the Fed is kept interest rates historically low. Now, why do many experts think were not facing the same problem we did 15 years ago. Well, because conditions are very different. For one thing, lenders were far too lenient in 2006 giving loans to people who really lacked the resources to keep up the payments foreclosures rose. Some investors speculated on that bad paper and others sought to dump it out today. Lenders are far more careful about who their lending to. In fact, many mortgage lenders actually tightened underwriting requirements as a result of the covert shutdowns which means today's buyers are more qualified for loans than they've been in years, and that makes a surge in foreclosures that would precipitate a housing bubble bursting far less likely. Another factor leading to high housing demand and high prices is the lack of inventory there just aren't enough homes on the market these days to meet demand that when the housing bubble burst in 2008, many builders had been engaging in speculative construction and were overleveraged when the market crashed.

Many were wiped out new home construction has only started to come back in the last few years. Meanwhile, millions of millennial's were growing up getting married and having kids and wanting to move out of cramped apartments. In other words, a good part of today's housing demand is real, not speculative, but there is one factor causing some analyst to be concerned. And that's the ongoing level of mortgage forbearance due to covert edits peak nearly a year ago. More than 4 million Americans have mortgages in forbearance with unemployment slowly going down in fairly strong economic growth. One would think that most of those homeowners were now out of forbearance. Having caught up on their payments but that's just not the case of the mortgage bankers Association reports that as of mid April about 2.3 million homeowners were still not making some or all of their mortgage payments of the federal government has extended forbearance and foreclosure moratorium several times, but those measures can go on forever expert save all those homeowners defaulted it wants it would cause another housing crash, but rest assured, the federal government has a lot of arrows and it's quivered to deal with that. So what we do with all of this while we should rest assured that this is not a repeat of 2008. We should keep a watchful eye. Given that real estate prices are in fact ahead of themselves and return to biblical and wise principles about buying a home that means by within your budget. Pay a fair market value put 20% down and stay put for 5 to 10 years are your calls or next. Here's the number 800-525-7000 800-525-7000.

This is moneywise live for God's principal shape financial decision about the moneywise live. We recognize God owns everything, therefore, were stewards and money then is a tool to accomplish God's purposes, I am Rob West.

So glad you're along with us today as we mind the Scriptures and apply God's wisdom principles we find in Scripture related to financial management to your financial life. What's on your mind today to talk about giving your saving. Perhaps its debt repayment is long-term savings or lifestyle. Whatever it might be. Give us a call. Here's the number 800-525-7000. We have a few lines open 800-525-7000 just before the break we were talking about this housing market. Boy is it ever increasing rapidly and has been for quite some time.

We talked about the reasons why and how it's different than the housing bubble we saw in 2008, but I finished just a moment ago by reminding you of some basic ideas you need to keep in mind as you head into any home purchase, especially in a market like this one.

Let me revisit those were talking about buying a home that fits well within your budget. That means at the minimum, make sure that that principal, interest, taxes and insurance payment is not more than 25% of your take-home pay. Do your best to pay a fair market value.

Don't get caught up in the emotions of chasing a purchase price that continues to elevate well beyond its appraised value. Because of the competition out there to buy homes upon a minimum of 20% down. That's gonna make sure that you stay out of paying private mortgage insurance and give you good equity so you don't find yourself in a position where you could be upside down.

If you receive cooling in this housing market, even though again I don't expect any kind of bubble bursting and try to stay put. When you buy that home for 5 to 10 years that's gonna make sure that over time, no matter what happens in the next 12 to 24 months. The long-term trend should still be positive. Keep in mind we have an inventory challenge with regard to the number of homes needed in this country versus the number of people looking for single-family home so others can be long-term demand. There also want to mention coming up on Friday, mortgage expert, Dale Vermillion will join us to talk about financing a home during these conditions you won't want to miss that again that's Friday with Dale Vermillion, Ari, let's head to the phones today are working to start today in West Palm Beach Florida, just north of where I was born Conchita thank you for calling today. How can I assist you all today very well, thanks. I think that Marcus and I just had an email from them that they have a promotion to help. I get.

They help me save more money in my savings account if I will lock in a nine month CD at the .65 I just want to know if I should do that. I don't know anything about feeding the slow certificate of deposit is essentially a savings vehicle where you give the bank your money. They lock it up for a stated period of time for 12 month CD that would be for one year for 12 months and they're going to give you a stated interest rate if you leave the money there and then redeem it at the end of the period of the challenges with interest rates so low right now Conchita it's just not worth you locking up your money that long. I like Marcus a lot. It's a great online bank.

It's a division of Goldman Sachs. They have a great app they offer no fees on their products. At least their savings accounts and they do pay a well above average on their interest rates but right now you can get to their online savings account at 1/2 a percent and that's with FDIC insurance and it's completely liquid so for you to get an extra 15 basis points. The difference between 1/2 a percent and .65 and lose access to your money for a full year without paying a penalty to get it back.

I just don't think that's worth it.

Not to mention the fact that rates are to be heading higher and so you'll be able to lock in a higher rate down the road so I probably just have them put that money in your online savings account there. Marcus River. You can link it up to your checking account. If you need to move money, but the real objective here is to just identify the purpose of this money yet. This is truly your emergency savings, which we recommend you have 3 to 6 months in liquid savings that I leave it right where it is an FDIC insured account were you earning a little bit interest but I don't see a need to out to lock it up for a full year. Hope that helps you.

Let's head to Moses Lake, Washington Keenan, you're next on the broadcast, what's on your mind today. Well I have a little over three months liquid capital side, but I'll now have a little over five cash I've been saving the last eight years and now that it's over $5000. I wanted to note, should I look at long-term Roth IRA money market or some other type of higher interest, take out where those located in 29 years old. I'm looking for long-term and hopefully minimize impact very good kid and I like your thinking. I appreciate that you referenced your emergency fund of three months expenses. That's a great foundation under you. I assume that means you have no credit card debt.

Correct. Very minimal. I keep it at a certain level because I've been part of a family on what we have to use our personal finance loans for certain expenses LLC and they don't they don't, our bank doesn't get much corporate law they won't give it very manageable. My subordinates around 720 on my credit less than $3000 okay are you charging up and paying it off at the end of every month. Are you carrying a balance.

I'm carrying a small balance than what I do charge up like yeah I would just encourage you to pay that off in full every month. Good make sure using that only for budgeted items.

Here's the thing with regard to your credit score and I can certainly appreciate being in a small business that doesn't that has minimal business credit and therefore your personal finances are on the line, but to date there is no difference between you charging it up for budgeted items and paying it off in full. There's no difference in terms of the impact your credit score doesn't help you to carry a balance. In fact, that's gonna push your credit utilization up a bit and it's gonna cost you some money and interest so I'd challenge you to rethink that and perhaps get that down to zero every month beyond that is always your giving systematically and you got this emergency fund.

I think the next thing is looking toward long-term savings.

I assume you don't have because of what you described a retirement plan available to you at work. Is that right like my parents so my minor stakeholder but I will not be don't have restart managed 401(k) like that, but simply, you may want to look at what's called a simple IRA which you could do for the business and it might be an attraction. If you need to hire other people down the road. Expand your employee base. It would give you an option to offer them a retirement plan with a lot of with the not much administration and cost like you have with the 401(k). In the meantime, it sounds like our Roth IRA would be ideal.

You're young you got money to put away you could put 6000 for you and then you could do another 6000 for your spouse, of 12,000 could go in this year.

If you have the ability to do more than that, you could look to something like a separate IRA or solo 401(k) but I think of a Roth is a great place to start if you don't Artie have a relationship with an institution. I probably look at either Charles Schwab with their intelligent portfolios better men 12th run one of the Robo advisors were you can open it in account with very low fees through question-and-answer process still build you a very well diversified portfolio using ETF's index funds to basically buy a broad section of the market that's appropriately allocated toward your risk tolerance and age and just systematically put the money into you and your wife's Roth IRA every month again.

Up to that 12,000 and if you get to the place where you're capping that out before you file your taxes for this year than you can look into opening a setup or a soul. Okay, I think you will appreciate having that will certainly begin to get some money going in, not a tax-deferred environment but a tax-free growth environment because you're not getting get the deduction on the money going in but you get all that tax-free growth between now and retirement. Hey God bless you. We appreciate you listening, thanks for calling you very very much, moneywise. Live your questions.

800 525 we come back talk to Lorenz and Idaho Diane and Bill in Fort Lauderdale. This is God's will look back to moneywise live or intersection your financial life. So glad to have you along with us today. Later in the broadcast will be talking with Bob Dall he stops by Monday with his moneywise market commentary. Bob is an industry veteran, managing billions of dollars in the markets is market economist as well as a market analyst to frequently on CB, CNBC and FOXBusiness. Bob's a believer and shares his insights on the markets and the economy each Monday on the program you won't want to miss Bob's commentary today. By a little later will look forward to that phone lines open today 800-525-7000 W RMV in Fort Lauderdale. Bill, thanks for listening. How can we help user hello are you good. Thanks and call mom recently with my mortgage company, they offered a forbearance letter to talk about and due to my own failure. I charge up in credit card debt which is highly unlikely, but I did probably ached out and my plan was to go and accept the forbearance I did for six months.

I can stop at any time, but they did not 100% guarantee me in writing that it will be placed on the back of the law. I don't want to end up six months later, Nate ALS, and grammar something like that. Bobby said they did tell me that I would have the choice to put on the back pain all at once or stretch down payments and due to the nature of my mortgage button on the back of the temple and I want to use it. Cato's credit card lately, and even possibly build up my emergency fund will what do you have any insight on the assurance appointment on the back and even a good idea to custom mortgage in order to pay off credit cards yeah no I'm not a big fan of that just because number reasons. Number one, and I realize it may be extenuating circumstances here as to why the credit card debts here in the first place. But the tendency is to use the home equity, which a lot of folks are sitting on a good bit of home equity right now just because of the increase in home values to see that is easy money to come in and pay off debt.

That's a result. And again, this may not be the case here, but the result of overspending which doesn't break the cycle because you don't do the hard work balancing the budget, yelling, sacrificing in the long term.

In the short term but you come in and wipe it out and then usually year later the credit card debts back but now we've got to get more money against the house number two is were taking what's unsecured and were securing it to your home which I don't like that either.

And even though were lowering the interest rate because were stringing out over a much longer period of time.

You know, you may end up paying the same amount anyway so my preference is to start with the budget right size the budget figure out how you can dial back lifestyle and spending so that the budget balances and then take care of the credit cards out of cash flow using either the snowball method smallest balance. The largest euro paying it down out of margin, putting every extra dollar beyond all the minimum payments toward the smallest balance until it's gone. And then right on down the line or using a credit counseling program where the interest rates are reduced and through a level monthly payment that fits in your budget, you will typically pay off 80% faster in credit counseling deal with the forbearance. You know that's not clear or necessarily how each lender's handling it.

It's up to the lender. There are several ways they do it where they require lump sum at a stated time. Short-term repayment plan or loan modification with a additional monthly charge and top your regular mortgage payment that makes up the difference. Or, as you said, putting it on the back and note any number of ways they can handle it. Obviously, putting it on the back and is going to kick the can down the road a little bit longer so you can deal with these other issues, but again I'm not a big fan of using it to pay off credit card debt. Only in a dire situation, especially in a one. Like many have gone through with Kobe the last year where they just simply couldn't make the payments.

The money wasn't there. Hours were cut. They were laid off and so they found themselves in a situation where they just needed some of that pressure to being taken off and that's where these forbearance options were required, and allowed them to weather that storm, but give me your thoughts on what I just shared it well worth all the toys I got with the credit card reported no other excuse and that what many many years I never carry a balance not market embarked on $100 happened but anyway if I want to pay them up with my good concern because it interests her, I am so full of Titus was hoping to get it paid off. But they would never go back up again. I know you pointed out many times but that's just not like me anyway just to pay them off our went on to the back end of the structure of the flow microcredit 40 year I'm already 69 you want to get paid off if I don't sell anything in the meantime, put on the back would be a real it would be no pressure and heart off which is really my concern. I don't have a problem making a payment, I'm just doing it just cards off right now.

Otherwise an idyllic 30-center my income with but things are going to start, back in June make him gunning great.

Potentially, I can't predict the future but your money goes on the back.

I'm okay but yeah well I would certainly call them and confirm that I'd probably just be still in hearing go ahead and put it on the backend, and then focus on those credit cards get this paid down as quickly as you can and then let's make sure moving forward. We have a good budget style then living on that every month you got some margin and then bill you can start prepaying that mortgage sending extra reducing that principal balance which is going to save interest over time there as well. Let's use the forbearance is a good opportunity to get your financial foundation shored up and I think you feel a lot better once those credit card debts are gone. Your income begins to rise, and you can get on a much stronger financial you have a question that you haven't gotten through the program's questions of moneywise.org for moneywise after your app store to search the moneywise biblical fine with us right back to back to moneywise live as God owns it all my scriptures each day to apply God's truth in your financial life just ahead really talking about what to look for its policy, whether you should draw for a with an IRA to pay for home repairs will talk about retirement investments prefers working ahead to Tampa Florida. Diane, your next on the program.

How can help you. Thank you and all summer holiday with family 300 pound weight plate line of credit any time we want. Right now I'm making almost everything. Keep on your making more like having the stock market really really let hundred thousand dollars loan on now. Should we just take 100 and pay the loan off and not have any debt or have to worry about stock market going up or down or anything like that yes and what is this what type of account is this that the stocks are in is a taxable account account for capital gain weight probably 2010% pain capital gain on the money that we made.

I see and as you look at this field where it is this where these investments fit into your overall retirement plan to be, do you have other assets that your building for your retirement in tax-deferred investment accounts above and beyond the IRA.

We probably have about 400,000 and IRA okay and you obviously plan to keep this home for the foreseeable future.

If you sold one would you sell the Florida home or do you think you'll end up keeping both downside Florida original thought. Downside extra cash out of the Florida home to pay the loan off with housing market like you were talking about. We don't know where to go quickly. Yeah well the good news is you get top dollar for the sale, arguably, that you could roll into the next one but you may have a challenge finding that next one. Just because of what's going on in the real estate market, you know, I think you could go either way I'm not a big fan of margin I'd probably rather you yelled take a loan out from the against the home for that hundred thousand euros secured by the home as opposed to having margin against the stocks in that way you know everything is separated, you got your home with 200,000 in equity in $100,000 mortgage that you can focus on paying back as quickly as you're able to, or if you had a real conviction that you just wanted to be debt free. Diane fully supportive of that. And I mean there be folks that on paper would say this doesn't make sense. Let's look at the difference between what you're making on this money versus you know what you're what it's costing you and therefore on paper this you know it's in your best interest, but for me I just think there's a sense of peace of mind that comes with that were clearly encouraged in God's word to become debt-free over time doesn't mean borrowing is a sin, but clearly changes the relationship of borrower's servant to the lender and you know debt was used as a an example in the negative in more cases than not, so it's not something we want to have hang around if we don't have a need to know you as long as were use it for appreciating assets and it fits within our plan and husband and wife are in complete agreement yelled. The cost is less than the economic return, then I think those are some rules we can look at to say okay this is permissible debt, but I think we should still strive to be debt-free over time and if you can either liquidate some of those earnings which probably have done very well over the last decade or longer and use that to own this home free and clear which is good. Increase your cash flow which get you more money to give away or put it back into long-term savings, then I think that's a good thing. I think you'll end up with some peace of mind to know that you're unencumbered and you no matter what happens in the stock market you own this piece of real estate free and clear. You know that's that's a good thing. But if you all know didn't mind having some debt on it and want to keep some more powder dry, so to speak in the investments. I think the other way to approach would be to take out a small mortgage against the property and pay off that that stock margin on the investment portfolio. Does that make sense on our investment.

No cloning caught only interest in mind, we don't pay back the principal way instead of a mortgage mortgage closing and everything was a lot. We also dabbled a little bit but the first time this past winter day actually had the house rented for every weekend for three months and covered all our basic expenses on the house nor yes, well, that makes a lot of sense to me that you will feel being very wise about how you're doing this and clearly I understand the cost associated with taking on the mortgage and you know the interest is is very low compared to what you would be paying on the investment. So it's not that you're making a bad decision here financially. I think this just comes down to the end of the day. Do you want to be free and clear would you feel better knowing that you have this home completely paid for and you don't have any debt against your investments, even though it is collateralized.

We realize it's in the markets, and Gail, who knows what's going to happen there although you got quite a bit more in that portfolio than you borrowed. It sounds like, so I would just get going with your eyes wide open and don't feel bad if you and your husband have a conviction that you like to be debt-free about paying it off and then don't let anybody tell you otherwise. But if you're comfortable the way it is you.

I don't think you're making a bad decision here. Just hearing the rationale of what you've done in the way you structure very good Diane. We appreciate your call today. Thanks very much. Let's quickly go to Apple Idaho Laurenti you're next on the program. Go ahead Athol ATH OL okay great. You guide for her.

Eight.

I am a retired teacher. I'm almost 73 and I don't have any assets at all. I don't own a home in my car. It's very old.

The only thing I have is a small nest egg of about $37,000. I've got 27 invested with American funds in the other camp out and I just took To purchase a new car, my car, it got over two and 50,000 miles on it. What I need to know is why you sent money to buy a car and should I even balance 27,000 where it's an investment. Let's do this so I appreciate you unpacking all that it makes a lot of sense because take a quick break and come back for we hear from Bob Dole today is market analysis will answer your questions. Should you call just hang in there with us a few more minutes. This is moneywise live this morning, just around back to moneywise live just ahead.

Bob Dole will stop by with his weekly moneywise market commentary what's going on in the markets and the economy and how does that affect your just around the first in Apple Idaho Laurenti call just before the break.

Clarinda was telling us about her situation.

She's living off of Social Security income plus some part-time work. Her assets consist of 27,000 currently in American funds.

She's recently taken. 10 out of that portfolio. It was 37,000 that's in cash which is getting used by a car and she's just wondering how should she invest that 27,000 given her situation moving forward Clarinda you know that the challenge here is obviously ill. As long as you continue to work part-time, plus the Social Security.

It sounds like your expenses are covered. Obviously you have limited assets available, and so I think you're buying that car for cash you make sure you get a good independent, reliable mechanic to help you evaluate the car, make sure it's in good working order. Doesn't sound like we have a lot of margin here and normally what I would say is let's take six months minimum expenses in your season of life. Let's put it in just a straight savings account. I understand your wanting to keep it invested so it has the potential to grow because when you start your when you stop working. I think you said you'd be short about 600 a month on your know your housing is 600 a month.

What is the gap between your living expenses today and your Social Security you have a sense of that 700.700 a month okay yes so that challenges that you with the need to to have an additional 700 a month or 8400 a year know that's going to cause you to run through that 27,000 in a hurry so I think were going to need to be looking for other solutions. Lord willing you'll be able to continue to work a long time I don't love the idea that you'd be anything but just very conservative with your investments on the 27,000 so you're probably largely in in bonds with just a small allocation to stocks.

The problem is, even though we had a great run up in the stock market to this point, you're taking more risk than you should.

With money that really you don't have to invest and so the Lord willing you'll be able to continue to work your part-time for quite a while, but at the most.

I would be looking to only be investing about 30% of this 27,000 in stocks. Clarinda just given the situation here because I want you to have something to fall back on and if your two from now. We got into a real recession and you were 100% stocks and that 27,000 was no down 30%.

You might get a statement and it's also worth 17 five and that's the situation you could put yourself in where you're taking risk.

That's not appropriate given your financial situation, so I'd stay very conservative, if not all in your savings account just where you can hopefully add to it each month a little bit through your working at the minimum, you know what a largely bond portfolio with a little bit of stocks so you could get some growth. Let's say the Lord allows you to work you know for a while then hopefully you're adding something to it.

That plus you know modest gains in the market in the let's say you're earning 45% a year instead of 1/2 a .1% a year in savings go that's can help every little bit helps. And you know that that that point will just trust the Lord for your provision. Does that make sense never heard of the savings at that pace for pretending year. Well it's not your know you're talking about investments and so what you're saying is you're fully invested in stock mutual funds in American funds. What I'm saying is you need to move Adam is the most aggressive posture I would be as this is a portfolio of bonds. Let's say 60% bonds are 70% bonds with the 30% in stocks where the goal of that portfolio is is 4% a year, but you're still taking risk.

The bond market can be down in fact bonds. Your prices have been falling as interest rates have been heading up even right now, and even the state of the stock market is hitting new highs.

It could in a rollover and will at some point in the future. So by building a portfolio like that you're on the more conservative end of the investment. Your risk level, which are still taking risk.

The alternative is you go straight savings account. And today you're going to earn 1/2 a percent on that and that will increase over time with interest rates, but it's still not good to be a very exciting amount. And so I realize you're looking to make some money and so what I'm saying is definitely not 100% stocks at the most. I would go 30% stocks and probably 70% bonds to follow my indent yes I did my investment advisor. Can he put it in stock on you what you want to bond you just say listen, I know I want to have a growth component to this.

And so you know, perhaps the target is maybe 30% stocks, but the rest would be given the amount bond mutual funds were trying to earn a little bit more yield than you'd find in a savings account. But where you're still staying fairly conservative in your overall risk exposure so well. We appreciate your call today. I hope that helps and thank you for returning into the broadcast. Before we take our next call. Excited to have Bob Dole with this Bob bug joins us each Monday with our market analysis and market commentary Bob, good afternoon to you and say dear Sir hey before we get into the look forward let's talk about last week of the big news was the disappointment on the earnings front, 266,000 in terms of employment versus nearly a million in game was that a surprise was I think all the other indicators were pointing for most people to a strong gain in employment. The 266,000 million was disappointing to a lot of people is causing people to see me be.

There are labor shortages poking their head made their issues related to G.I. can make more money collecting money from the government than going out work and that's starting to be part of the dialogue.

And that's a bit concerning, yes, well we obviously still have plenty of reasons that the market is reaching new highs. The rally is continuing, not the least of which is just this large global economic recovery. But what of the other drivers that is the main near-term hair tailwind that is strong economy and strong earnings.

We are almost complete first-quarter Rob and it's going to go in the history books is the strongest quarter from upbeat standpoint doing better than expected by a wider amount than ever before, and that's a lot of tailwind doesn't mean the headwinds aren't there in fact is I complained little bit last Monday when we talk some of the averages are not making progress for the last month and that I think that indicating that the markets know how good news is little worried about higher taxes them every time you turn around. Prices are higher somewhere so we have an inflation issue can be negative, but I do think that cause an arrest is more in order for the stock market. Yeah well there's a lot of things to celebrate. But as you said, we do certainly have our headwinds.

So what does that mean then as you continue to analyze this going forward 12 months out were you looking for so I think first for this calendar year. The easy gains are probably in the rearview year coming into the year. We thought stocks will be up this year but less than earnings and never did we dream on January 1. How strong earnings would be, so we still think it will be up here but the next step will 3 to 6 months, 12 months stocks may not make a lot of progress Rob because it's digested a lot of the good news with this set rally we've had literally last 12 months off the recession low so I think that that will continue to see good earnings, but maybe some pressure on valuations as interest rates continue to creep higher interesting with that disappointing labor report last Friday that you opened up with how interest rates initially went down and write back to where they started and I noticed today that a few more pics so interest rates are creeping higher and that's on the back of the little inflation out there to no doubt well if we laid out all the scenarios of what would happen a year ago today, with the economy. This would clearly have been the best case would know? It's amazing how fast the economy has come back. It's amazing how many companies and industries of actually been helped by the pandemic.

We know the ones that have been hurt a lot of them are still in and hurting mode if you will, but that some of the technology sector segments in other parts of healthcare housing because of lower interest rate is been big beneficiaries and that's what Howard the economy and earnings and jobs. No question about it will not always appreciate you stopping by and telling us what's happening around us, analyzing the trends to both the on the near term and on the longer term will look forward to having you back next week. Have a great week are accomplished buddy back to the phones Tiffany and West Chicago you to be our final color today understand you got some home repairs and major can I help we are looking at having to repair ardently to our deck." I have gotten 20 500,000 that the larger deck and then we kind of are in the middle of a master bathroom recently finished our remodel and in that outbuilding, quoted at 25,000 so I'm wanting to know I have inherited IRA that I can be in.

I take money out of that I be paying taxes on it or do I want to try to go for a home-equity loan or personal loan. Yes, you know, I would probably look toward the home-equity loan before I would look to the IRA just because the cost on the taxes. Now that's money you're going to have to take out any way depending upon how you're handling that from an inheritance standpoint you want to talk to your CPA about that. And obviously that becomes money that's in play, but I wouldn't be taking it out and paying tax on if you don't have to. You have to feel you have the option to leave it and let it continue to grow in that case, have you looking home-equity loan not a home-equity line of credit we can lock in that fixed interest rate. My best advice today. Good luck with all the construction is expensive. Along with us today. Folks moneywise. Life is a partnership between radio and moneywise media will be back again tomorrow with another edition of